Monday, February 15, 2010

Dillard's Doomed At Atlantic Station?

With the recent closings of both the Target off Highway 78 in Snellville and the Publix on Martin Luther King Drive near Castleberry Hill , I would not be surprised to see Dillard's at Atlantic Station hint at closing as well. I say "hint" because I doubt the brain trust at Atlantic Station will allow for them to close, striking the biggest blow to the intown development since its opening. While countless other tenants have closed such as Pier 1 Imports, Knitch, Au Bon Pain, PJ's Coffee and WaMu and a number of others pulled out pre-opening, the Dillard's closure would be too great a loss for management not intervene. Insiders have told me that even the Publix and H&M are not making their goals but both are hopeful for the future and are not willing to throw in the towel just yet. Dillard's has got to be paying a ridiculous amount in rent and will have to get it lowered to remain in the development. This past year the retailer closed a number of under-peforming stores and I was surprised the Atlantic Station store was not at least mentioned . While I don't go to Atlantic Station unless utterly necessary, I have never seen more than a handful of customers in the store at any one time. I have however always seen an exorbitant number of employees in the store even with the lack of customers. I give them kudos for lasting this long but Dillard's will not survive if their rent goes unchanged and Atlantic Station continues to experience closures than openings. ToNeTo Atlanta

5 comments:

Anonymous said...

Hmm. Typically at "normal" malls anchors such as Dillard's own the building they are in and therefore don't pay rent to the mall owner. I know your article is just full of conjecture, but do you know if that is the case at Atlantic Station?

Atlantan99 said...

Anon,

Do I know with the utmost of certainty this is the case at Atlantic Station, no. Do I feel confident given backround info and other tenant arrangements that it's a safe bet I'm accurate, yes.

Thanks for the comment.

Anonymous said...

I have managed large regional malls, both suburban and urban and generally the anchor department stores own their own building. So I would suspect that Dillards does own their own buildig, thus they will not be going to Atlantic Station Management seeking rent relief. I can not speak on Dillards sales at Atlantic Station, but this is a highly visible store for them , so I would assume they would hang on as long as possible....I don't see them gaining a space at either Lenox or Phipps and they need an inside the Perimeter location. Dillards has a tendancy to build "over sized" stores and as such they always seem empty. Their store at Perimeter never seems busy to me

Atlantan99 said...

Anon,

You make some good points. I could never see Dillard's at Lenox or Phipps (many say even Belk is out of place at Phipps) For all I know you are right about the ownership of the building but while the space is big, a business must justify its size with sales. Perimeter in fact is often busy and is the chains best performing store in metro Atlanta.

Anonymous said...

Co-tenancy clauses (most likely, naming Dillard's in particular) in a lot of these retail leases would make the landlord keep Dillard's by any means necessary. http://www.investopedia.com/terms/c/cotenancy-clause.asp and http://nreionline.com/finance/news/shopping_center_owners_bankruptcy_0226/ for more background on these clauses.